Whole Foods Founder Says Too Many Companies Get Capitalism Wrong

Whole Foods' rise has been unique in many ways. It's taken a concept that was once considered very niche—a focus on local and organic food—and turned it into a multi-billion-dollar international business.

The company's founder and Co-CEO John Mackey is trying to take the company's ethos to a larger audience in his book, "Conscious Capitalism," where he argues that business and capitalism are the greatest creators of value in the world.

That's opposed to the popular perception. "The narrative of business is this," Mackey told an audience at a recent event, "its greedy, its exploitative, it's really all about making money."

In order to fight that perception and reclaim capitalism and business as positive words, businesses have to find a purpose beyond just making money. Profit is necessary for business, Mackey said, but it's necessary in the same way that his body has to produce red blood cells. It's needed, but it's not the sole purpose.

The second thing is to be conscious about creating value for every one of its stakeholders, to work for the benefit of employees, customers, investors, and suppliers all at the same time to create a virtuous cycle.

He gives the example of his own company as a model. Whole Foods hires the best people they can, trains them, and then makes an effort to make them happy. If they're happy, then customers are happy, and if customers are happy, so are investors.

When you add suppliers and society as a whole, and work to create value for all of them, you optimize the system, Mackey said. Just trying to make money is suboptimal.

We had the opportunity to speak with Mackey, and he told us a bit more about what he's trying to do.

"I think probably the most important idea [in the book] is that business is good but that it can be made better," Mackey told us. "I don't think most people realize the value that business creates, they just see what's wrong with it, or where it fails, it's held up to a standard of perfection that's unrealistic."

It's partially an effort to show businesses can create value other than profit, and partially a guidebook for how they can do it. "I'm very much for business evolving, because we need it to," Mackey said. "We're in a difficult time in our journey right now and we need business to take its place and be powerful and conscious and do good things."

Too often, businesses focus on profit because that's what they've been trained and rewarded for. A mindset evolves where everything becomes binary. A decision that gives more than the minimum to employees or helps the environment is seen as coming at the expense of profit.

According to Mackey, there's no reason it has to be that way. "I look for solutions where there's no conflict. Where there's conflict, where there's tradeoffs, it's just a failure of imagination," he said. "There's always a win win, you just haven't found it yet. So go back and look. If you look for tradeoffs, you'll find them. If you look for win-win-win, you'll find that."

There's no inherent tradeoff in working for purpose and profit at the same time, just a false one that people have created.

There are always going to be people who respond to businesses that work for something other than profit alone. At least that's been Mackey's experience with Whole Foods. "You don't have to persuade anybody, he argues. "You put your message out there and some people grab it, and some don't. Everybody doesn't like Whole Foods Market. But we don't have to sell to everybody. We did almost 12 billion in sales last year, so clearly there are a lot of people [who] like what we're doing, even if everybody doesn't like what we're doing. So put your message out there and you see who it resonates with."

That's the lesson of Whole Foods' success in a nutshell. It isn't designed to appeal to everybody. But it appeals very intensely to some, and there have been enough of those people to grow it into a billion-dollar company.

The people who respond to your message are the ones you can work with. "They're the ones ready for it; others may not be ready. You can't please everybody, you just have to be true to yourself, and do what you think is best and right," Mackey said. "I've found that usually works in life."